There are 2 main models or types of crowdfunding. The first is what’s called donation-based funding. The birth of crowdfunding has come through this model, where funders donate via a collaborative goal based process in return for products, perks or rewards.
The second and more recent model is investment crowdfunding, where businesses seeking capital sell ownership stakes online in the form of equity or debt. In this model, individuals who fund become owners or shareholders and have a potential for financial return, unlike in the donation model.
Crowdfunding Sites To Choose From
Business owners are using different crowdfunding sites than musicians. Musicians are using different sites from causes and charities. Below is a list of crowdfunding sites that have different models and focuses. This list can help you find the right place for your crowdfunding goals and needs.
MoolaHoop is a rewards-based crowdfunding platform that enables women entrepreneurs seeking to raise funds for their small business. MoolaHoop enables women-owned, managed and led small businesses to easily engage their “crowd” of existing customers, potential customers, family and friends in order to raise funds for their business. The Entrepreneur has 21 days to raise these funds and sends a link to this campaign out to customers, family and friends. The best part is that the Entrepreneur offers potential Supporters great Rewards – deals on their products or services or unique experiences – at each level of contribution.
CircleUp connects investors with consumer brands and retail companies. They look for innovative consumer and retail companies that typically have substantial revenue or other indicators of potential success. Their team of professional consumer-focused private equity professionals evaluate each opportunity and list the ones that pass our criteria onto CircleUp.
Kickstarter is a site where creative projects raise donation-based funding. These projects can range from new creative products, like an art installation, to a cool watch, to pre-selling a music album. It’s not for businesses, causes, charities, or personal financing needs. Kickstarter is one of the earlier platforms, and has experienced strong growth and many break-out large campaigns in the last few years.
While Kickstarter maintains a tighter focus and curates the creative projects approved on its site, Indiegogo approves donation-based fundraising campaigns for most anything — music, hobbyists, personal finance needs, charities and whatever else you could think of (except investment). They have had international growth because of their flexibility, broad approach and their early start in the industry.
Crowdfunder is the crowdfunding platform for businesses, with a growing social network of investors, tech startups, small businesses, and social enterprises (financially sustainable/profitable businesses with social impact goals).
Crowdfunder offers a blend of donation-based and investment crowdfunding from individuals and angel investors, and was a leading participant in the JOBS Act legislation. The company has localized crowdfunding and investment to help develop entrepreneurial ecosystems and access to capital outside Silicon Valley. Its unique CROWDFUNDx initiative in cities across the US and Mexico connects local investors with local entrepreneurs both online and offline, and does the work to validate top local companies in each city across the US and Mexico.
Rockethub powers donation-based funding for a wide variety of creative projects.
What’s unique about RocketHub is their FuelPad and LaunchPad programs that help campaign owners and potential promotion and marketing partners connect and collaborate for the success of a campaign.
Crowdrise is a place for donation-based funding for Causes and Charity. They’ve attracted a community of do-gooders and and fund all kinds of inspiring causes and needs.
A unique Points System on Crowdrise helps track and reveal how much charitable impact members and organizations are making.
Somolend is a site for lending for small businesses in the US, providing debt-based investment funding to qualified businesses with existing operations and revenue. Somolend has partnered with banks to provide loans, as well as helping small business owners bring their friends and family into the effort.
With their Midwest roots, a strong founder who was a leading participant in the JOBS Act legislation, and their focus and lead in the local small business market, Somolend has begun expanding into multiple cities and markets in the US.
If you want to build the next new mobile app and are seeking donation-based funding to get things off the ground or growing, then check out appbackr and their niche community for mobile app development.
If you’re a tech startup with a shiny lead investor already signed on, or looking for for Silicon Valley momentum, then there are angels and institutions finding investments through AngelList. For a long while AngelList didn’t say that they did crowdfunding, which makes sense as they have catered to the investment establishment in tech startups, but now they’re getting into the game. The accredited investors and institutions on AngelList have been funding a growing number of select tech startup deals.
You might want to create your own crowdfunding community to support donation-based fundraising for a specific group or niche in the market.Invested.in is a Venice, CA based company that is a top name “white label” software provider, giving you the tools to get started and grow your own.
If you’re an inventor, maker, or tinkerer of some kind then Quirky is a place to collaborate and crowdfund for donation-based funding with a community of other like-minded folks. Their site digs deeper into helping the process of bringing an invention or product to life, allowing community participation in the process.
(Source: Forbes Article + Best Mom Products)